etf investing for europeans in 2022

In case you’re wondering about how you can start investing into ETFs as a European investor, this post is for you.

I’ve been investing into stocks via exchange traded funds (ETFs) for almost five years now. As of December 15th, my wife and I have a total of 150.300€ in ETFs on several brokerage accounts.

Here’s what we’re going to talk about today:

  1. We’ll discuss whether or not you can buy US-based ETFs as a European investor
  2. I’ll show you how you can quickly find the right ETF for the index you want to buy (eg. S&P 500, FTSE All World, MSCI World) and how to compare available ETFs, to make sure you choose the best one
  3. And lastly, I’ll show you how to actually buy ETF shares using all of my favorite European brokers. If you’re based in Austria like me or in Germany, I’ll also show you how to do that using the best local brokers.

I hope that this post, as well as the video I recorded, will help clarify some of the many questions I’ve received about these topics.

Please remember that none of this is investment advice, just my personal opinion based on my own experience as an investor.

Can You Buy US ETFs in Europe?

More often than I would like, I get someone asking me why they’re not able to buy an ETF from the US.

Now, why do many Europeans start looking for US based ETFs in the first place?

That’s likely because the whole financial independence movement is a lot larger in the US than it is in Europe, so you probably first heard about investing from an American finance blogger. I got interested as well after hearing Mr. Money Mustache on the Tim Ferriss Podcast.

Chances are, you’re then left wondering why you can’t find the ETF they mention on your European broker.

This is not the broker’s fault, it’s actually due to European regulations. As a result, we’re not able to buy ETFs that are based in the US any more.

However, in most cases we can still invest into the exact same stock market index and the same companies. We just need to find the same or a similar ETF that’s domiciled in Europe instead of the US.

Oftentimes, it may even be offered by the same provider, like Vanguard.

How to Compare and Find the Best ETFs

Let’s see how you can find the right ETF for your strategy, which you can actually invest in as a European.

I like to use JustETF for my research. It helps me find all the ETFs I’m able to invest in as a European citizen and to compare all important metrics (replication method, use of profit – distributing vs. accumulating, fund size, costs and the ETFs performance since it was launched).

Plus, it gives me the information I need to buy the ETF using my broker, namely the ISIN number or the ticker symbol.

How To Buy ETFs as a European Investor

Let’s assume you have found the perfect ETF for your investment strategy and thanks to JustETF, you also have the ISIN number or ticker symbol to buy it. But, you still need a reliable brokerage account to start investing.

My two favorite brokers for investors from all across Europe are Interactive Brokers (especially since they removed inactivity fees in July) and Degiro.

Interactive Brokers
degiro

Both of them are highly reliable, strictly regulated and they’ve been around for a while and didn’t just jump out of nowhere as an app. But most importantly, they have extremely low fees for buying and selling ETFs.

As a rule of thumb, you never want to waste money on unnecessary fees, so you have more money left over to invest instead.

Note: I also mention Trade Republic later in the article, which was previously only available in Germany and Austria, but has recently expanded to France and Spain as well.

Let’s have a look at how you actually buy ETFs using different brokers, starting with Degiro.

Generally speaking, it’s best to place orders between 9 AM and 6 PM CET, as that’s when the largest European exchanges are open.

Degiro

Via Degiro Zero, Degiro offers a total of 200 ETFs which can be purchased commission-free (full list & conditions). Definitely make sure you check the list before placing an order, as it could help you save some money.

Luckily for me, this list also includes the one ETF my wife and I buy on a monthly basis, the accumulating Vanguard FTSE All-World (ISIN: IE00BK5BQT80, Ticker: VWCE). It enables us to invest into over 3.700 companies from all over the world. All via a single, low-cost ETF.

Interactive Brokers (Tiered or Fixed Pricing?)

Interactive Brokers has two pricing models, tiered and fixed.

I found an older sheets document online, comparing the two pricing structures. I tried my best to update it, now that Interactive Brokers lowered some of its fees even further:

interactive brokers tiered vs fixed
Here is my updated Google sheet comparing the fees between tiered vs. fixed pricing, feel free to use it!

According to my calculations, for orders up to 4.627€ each, fees should be lower using the tiered pricing model, after which the fixed pricing model starts being cheaper.

You can switch between the two pricing models in your Interactive Brokers account under account settings – IBKR pricing plan.

And here’s how you actually place an order on IB:

Interactive Brokers is not that complicated once you get the hang of it, but the interface is clearly more tailored towards professional investors and can be quite overwhelming when you start out.

ETF Investing from Austria and Germany

Now, if you’re based in Austria or in Germany, where taxes are more complicated, I recommend choosing a local broker for most of your investments. These take care of taxation for you, making your life a lot easier.

Flatex – The Best (Only?) Choice in Austria

If like me you’re from Austria, the best low-cost option by far is Flatex. They take care of any taxes for you, there are no account fees and they offer ETF saving plans.

flatex

A saving plan (“Sparplan” in German) allows you to buy specific ETFs on a monthly basis with either zero fees or only paying 1,5€ in fees for other ETFs, like the Vanguard FTSE All-World.

My wife and I have a monthly savings plan running here at the beginning of every month.

Ok, that’s it for Flatex.

If you’re based in Germany, consider yourself lucky as you have some fantastic local options. I like using these as well because of what they offer, but sadly they only take care of taxes for German residents.

Smartbroker

smartbroker

Smartbroker is my personal favorite German broker. What makes this one special, is that you can buy any stock or ETF free of charge as long as you buy 500€ or more of it using the Gettex exchange. They don’t charge any account fees either.

Scalable Capital

scalable capital broker

My second favorite German broker is Scalable Capital.

Using the Gettex exchange, ETFs from iShares, Invesco and Xtrackers can be purchased without any fees, while other ETFs and stocks only cost 0,99€ in order fees. But where they stand out is with their saving plans for stocks & ETFs, which are completely commission free!

There are no account fees on Scalable Capital via the Free Broker model, which is what I use.

Interestingly, while the registration and the web-login are all in German, you can actually have the mobile app running in English. So if you’re not a German native speaker, it might be easier for your to use the broker via app.

Trade Republic

trade republic

The third and last German broker I want to mention is Trade Republic. If you’re planning to buy single stocks or only ETFs issued by iShares or Wisdomtree, then this is an excellent option. They only charge 1€ in fees per order, they have free saving plans and no account fees.

Trade Republic currently seems to be expanding to other countries beyond Germany and Austria, with investors from France and Spain being able to use the broker as well.

Alright, that was the last broker I wanted to mention.

In case you’ve been struggling with how to actually buy ETFs as an investor in Europe or more specifically Austria and Germany, I hope that this post and my video guides helped you out.

If it did, I’d love to know in the comments. Also, feel free to drop any other questions you might have regarding my choice of brokers!

ETF Investing for Europeans in 2022 (Video)

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Valuable Resources

  • My Investment Tools
    A list containing all my investments in P2P Lending, the brokerage accounts I use to buy ETFs, my speculative investments in Bitcoin and my free bank accounts. It even includes the tools I use for blogging and YouTube.
  • P2P Bonus Offers
    A collection of all the best, currently available bonus and cashback offers in the P2P lending space. Regularly updated.


Disclaimer: Investing involves risks of losses. You should always do your own research before investing into anything. Also, some of the links are affiliate links, which help support me, the website & YouTube channel. I only link to services I use myself, none of them are sponsored.

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2 Comments

  1. Hello Angelo,

    I opened an account in flatex and transferred some funds to start a EFT savings plan, but it looks like there is a exit cost of 5.9%. D you know what this is about?

    In the example in their site, it says for a holding of 3 years, it’s paid 1,5 euros in first year + expense ratio, the second year only expense ratio and last year expense ratio + 5.9% exit cost. Is this exit cost percentage over all 3 years amount, only last year amount or only last deposit?

    Sorry to bother you, I’m resident in Austria and still don’t know good german. Using flatex would really help with the taxes but if the costs are gonna be that much, I rather use Degiro, since I’ll already have to pay an accountant or do it myself for other brokers and invested assets.

    1. Hi Augusto,
      There are no holding or special exit costs. All the fees you have are 1,5€ whenever your Sparplan is executed (each purchase) and the 0,2% per year or so internally within the ETF (TER – total expense ratio). You never actually see the TER being deducted, it’s part of the ETF’s performance.

      The only other fees you have is if you decide to sell shares, then for example you pay 5,90€ in fees to Flatex, depending on the amount you’re selling.

      By law they’re required to show some sample fee calculations for each ETF, but they’re sadly a lot more confusing than helpful 😅